• The Nasdaq 100 closed at an all-time high, driven by gains in mega-cap technology stocks.
  • AI-related companies and semiconductor firms were the top contributors to the index's rally.
  • Supportive macroeconomic data and easing rate-cut expectations fueled investor optimism.

The Nasdaq 100 index reached a new record high on Thursday, closing at 20,142.53, surpassing its previous peak set in July. The milestone was powered by a broad rally in technology shares, with artificial intelligence and semiconductor stocks leading the charge.

“The market is pricing in a soft landing, and tech is the biggest beneficiary,” said a portfolio manager at a major asset manager, speaking on condition of anonymity. “Earnings have been solid, and the macro backdrop is supportive.”

Among the biggest contributors were Nvidia Corp., which rose 3.2%, and Microsoft Corp., up 1.8%, as investors continued to pour money into AI-related names. The Philadelphia Semiconductor Index also hit a fresh high, climbing 2.1%.

The rally came as data showed U.S. jobless claims fell more than expected, while the Federal Reserve’s preferred inflation gauge, the core PCE price index, came in line with forecasts, reinforcing bets that the central bank will cut interest rates later this year. According to CME FedWatch, traders are now pricing in a 65% chance of a quarter-point cut at the September meeting.

“The combination of resilient economic growth and moderating inflation is ideal for equities, particularly for growth-oriented sectors,” noted a strategist at a Wall Street bank. “Tech companies with strong cash flows and AI exposure are in the sweet spot.”

The Nasdaq 100’s record also reflects a broader market rotation back into growth stocks after a brief pullback in April. The index has gained 14% year-to-date, outpacing the S&P 500’s 11% advance.

However, some analysts warn that valuations are stretched. The Nasdaq 100’s forward price-to-earnings ratio stands at 28, well above its 10-year average of 22. “There’s a risk of a correction if earnings fail to meet lofty expectations,” said a market strategist at an independent research firm. “But for now, momentum is strong.”

In the options market, call activity on the Nasdaq 100 ETF (QQQ) surged, with traders betting on further upside. Volatility, as measured by the Cboe Volatility Index (VIX), remained subdued at 14.5.

Correction: An earlier version of this article misstated the closing level of the Nasdaq 100. It has been updated to reflect the correct figure.